Stark v. Stephens

• Decision Date: 02 February 1925
• Docket Number: 11040.
• Citation: Stark v. Stephens, 76 Colo. 550, 233 P. 619 (Colo. 1925)
• Parties: STARK et al. v. STEPHENS.
• Court: Colorado Supreme Court

233 P. 619

76 Colo. 550

STARK et al. v. STEPHENS.

No. 11040.

Supreme Court of Colorado, En Banc.

February 2, 1925

Error to District Court, El Paso County; Arthur Cornforth, Judge.

Suit by John E. Stephens against W. C. Stark and another.Judgment for plaintiff, and defendants bring error.

Affirmed.

Harris & Price, of Colorado Springs, for plaintiffs in error.

J. C Young, of Colorado Springs, for defendant in error.

BURKE J.

Plaintiffs in error were defendants, and defendant in error was plaintiff, in the trial court.They are hereinafter referred to as there.

Plaintiff owned a certain tract of real estate on which defendants held a trust deed in process of foreclosure, which foreclosure this suit was brought to enjoin on the ground that the indebtedness had been paid.Trial was had to the court findings were for plaintiff, and judgment was entered accordingly.To review that judgment defendants bring error.

The payment was made to one Miller as agent.The trial court held Miller to be the agent of defendants; they contend he was the agent of plaintiff.No other question need be considered here.

Miller once owned the tract in question and sold it to Salsbery taking the letter's note for $1,000 as part of the purchase money.The note was secured by trust deed, and this is the note and security in question.Salsbery sold the land to plaintiff, who assumed the indebtedness, and Miller sold the note to defendants.

This note was dated April 18, 1916, and was due April 18, 1921.Principal and interest were payable at the office of Miller in Colorado Springs.Privilege was reserved to pay the principal at the end of three years from date.The interest was at 8 per cent. evidenced by 20 interest notes numbered consecutively.Those bearing odd numbers were for semiannual interest at 7 per cent. per annum, $35 each, and those bearing even numbers were for semiannual interest at 1 per cent. per annum, $5 each.Plaintiff paid these interest notes regularly to Miller until April 15, 1919.On that date plaintiff was residing at Sedan, Kan., and from there he sent Miller $1,040, the total required to discharge the debt three days thereafter, the optional date fixed by the note.Miller received the money, paid defendants their interest note then due, and kept the remainder.Plaintiff made no further payments, but each six months thereafter Miller paid defendants their semiannual interest until August 9, 1923, when he died.The principal note was then more than two years past due.

Defendants had long done business with Miller and purchased of him many other notes.In each case he continued to collect the interest and collected the principal when due.This he sometimes paid defendants and some times applied on other loans which he transferred to them.Some 20 such loans were held by defendants at the time of Miller's death.They were bought with the understanding that Miller would collect principal and interest and attend to all details.Defendants never instructed him when payments should be made or loans reduced.Usually they did not examine the property or title, but took Miller's recommendation for both.

When Miller sold this particular note to defendants, he merely phoned, telling them what he had, and shortly thereafter brought it to them and received payment.It was understood from the course of their dealing in other cases, that Miller was to collect the interest.Miller's stenographer testified that all his loans, made and sold, were handled in the same manner, and that in the only case known to her where foreclosure was necessary Miller attended to that.During the time payments were being made by plaintiffhe was in Kansas.He did not know defendants owned the paper.The only evidence which would put him on inquiry was that the even-numbered interest notes which he paid and received were not indorsed, while those bearing odd numbers were indorsed, 'Pay to the order of W. C. Stark, F. Henry Miller.'The odd-numbered notes were the property or defendants.The even notes were the property of Miller, and his stenographer testified that they were Miller's commission 'and for taking care of the loan.'In 1920plaintiff saw Miller in Colorado Springs and made inquiry about the principal note.He was told that Miller had sent it to him...